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WHITE PAPER / CAPITALIZING ON THE VALUE OF THE GRID

BECOMING THE NEXTGENERATION (NXG) UTILITY

BY Kenneth B. Bowes AND Michael E. Beehler, PE

The value of the electric grid has never been greater, but the challenges of realizing that value have never been stronger. In the near future, new technologies, distributed energy resources (DER)

and the “grid of things” will demand an even more robust, reliable and resilient electric grid.


© 2015 PAGE 2 OF 9

WHAT’S NEXT?The opportunity for regulated

utilities to invest in the electric

grid to become the NxG utility

will be challenged by free market

alternatives unrestricted by

regulatory mandates or

rate structures.

How can the electric utility industry

work with customers, regulators,

shareholders and communities

to promote a better appreciation

and responsible transformation

of the greatest invention of the

20th century? Technologies of the

21st century will allow the electric

utility industry many productive

opportunities to capitalize on the

value of the grid. This paper will

refresh our general understanding of

the grid’s value and address ideas for

creative investments that build upon

that value for years to come. While

some of these investments are similar and incremental

compared to traditional investments, other investments

expand the solutions utilities can provide for customers.

This will be especially important as customers seek to use

the grid in diff erent ways, regulators seek cost-eff ective

solutions to policy mandates, and communities seek

alternative solutions for their energy needs.

THE VALUE STATEMENT 1

Our industry needs a simple, understandable statement

of value for the electric grid; an elevator pitch of sorts.

The grid is valuable because:

• It’s always there (with 99.97% reliability).

• It connects you to the lowest cost generation

at any given time.

• It connects you and me so we can transact

business if and when we choose.

The grid of tomorrow (see Figure 1) will need to meet new

— and changing — expectations of customers, off ering

more choices for integrating cleaner generation

sources into more effi cient loads. Customers desire

greater reliability and resiliency in the face of extreme

weather events and manmade threats. They will need an

information platform to satisfy an ever-increasing

demand for useful and easily accessible information

that will enable comfort, convenience and more control

of their energy costs.

How does the NxG utility satisfy these heightened

customer expectations cost-eff ectively? The answer is

both simple and complex: by modernizing the grid to

target investments in infrastructure that satisfy multiple

needs for system resiliency, integrating more DER,

and providing more information — a smarter grid —

for customer choices and improved utility operations.

RESILIENCYToday, resiliency means more than reliable service during

extreme weather events. It means having the capability to

provide backup power from an alternative utility source,

DER that can operate independent of the grid, or various

forms of emergency generation or storage systems.

Providing customers with improved reliability with

GridModernization

Integrated

Information - Smarte

r

Resilient

Figure 1: Targeting cost-eff ective investments


© 2015 PAGE 3 OF 9

automatic restoration of the primary voltage system via

loop schemes is not new. However, the deployment of

single-pole switching devices in place of traditional three-

phase devices and new low-cost single-phase reclosing

devices to replace fused cutouts will provide immediate

improvements in reliability. Redundancy of utility supply

will also improve the ability of generation, specifically

residential solar photovoltaic (PV) generation (usually

single-phase) to deliver kilowatt-hours (kWh) to the grid.

By making targeted investments in resiliency, the day-

to-day reliability can also be improved for customers,

so the benefits can be realized before severe weather

occurs. Resiliency also means prevention and mitigation

of manmade physical and cyberthreats. Hardening critical

substation assets using access control, video camera

technology, improved fencing and enhanced physical

barriers and ballistic protection can be layered into

traditional designs. Promoting a defense in depth strategy

for protection of cyberassets based upon national

regulatory standards and practices (see Figure 2) reduces

the risk of cyberpenetration. Physically separating the

control systems level from other information technology

systems and constantly performing diagnostics and

penetration testing can achieve high levels of security.

Redundancy in design can again mitigate such severe

weather effects as substation flooding. At the same

time, it can provide increased physical security and

cybersecurity for substation assets. By investing in

resiliency, the NxG utility builds a platform for further

grid modernization that includes a dramatic expansion

of DER and immediate reliability improvements, to the

benefit of more customers.

ControlZone

AV ServerPatchManagement

TerminalServices

ApplicationServer

Web ServicesOperations

Historian(Mirror)

HMI HMI

EnterpriseZone

Demilitarized Zone

Level 4

Level 5

Level 3

Level 2

Level 1

Level 0

Enterprise Network

Email, Intranet, etc. Site Business Planning and Logistics Network

Site Operationsand Control

AreaSupervisory

Control

Process

BasicControl

SupervisoryControl

SupervisoryControl

BatchControl

ContinuousControl

HybridControl

DiscreteControl

ProductionControl

OptimizingControl

Historian EngineeringStation

HMI HMI

Figure 2: Defense in depth model of control; logical overlay on SP99/Purdue model of control


© 2015 PAGE 4 OF 9

INTEGRATIONLarger penetration of DER meets the policy objectives

of many regulatory agencies and other stakeholders.

Integration of DER means the NxG utility operator

must deploy new systems and tools for managing daily

operations. Much the same way transmission operations

require real-time state estimating, SCADA control and

automatic generation control, new and similar applications

will be needed to manage DER. Applications such as

volt/VAR control will be needed to mitigate the adverse

eff ects of higher penetration of solar PV on utility

feeder on voltage profi les. As more solar PV is added

to the distribution system, voltages will rise and require

constraints or a maximum hosting capacity be established

to maintain the American National Standards Institute

(ANSI) allowable voltage ranges (see Figure 3).

By actively managing the volt/VAR controls, the NxG

utility operator can mitigate any potential adverse

impacts, such as overvoltage damage to equipment,

and improve energy effi ciency through conservation

voltage reduction methods. This investment opportunity is

a potential win-win for customers who choose to deploy

DER and those who do not. By actively managing the

feeder voltage levels, increased penetrations of DER will

be possible and customers can obtain energy savings

through benefi ts of conservation voltage reduction.

Several studies and industry experience has shown that

for a 1 percent voltage reduction there is a corresponding

0.5 percent to 1 percent energy savings. Replacing aging

technology for load tap changer (LTC) controls, capacitor

controls and line voltage regulation equipment can also

1.075

1.07

1.065

1.06

1.055

1.05

1.045

1.04

1.035

1.03

Maxim

um Fe

eder

Volta

ges (

pu)

Increasing Penetration (kW)

Maximum Hosting Capacity

5000 1000 1500 2000 2500

Minimum Hosting Capacity

2,500 cases shownEach point - highest primary voltage

ANSI voltage limit

Figure 3: Voltage rise on feeders with high penetration of solar PV 2


© 2015 PAGE 5 OF 9

benefit the NxG utility. Real-time

monitoring and control of the voltage

profile can help optimize system

performance for customers. Specific

investments in new controls, including

single-phase capacitor controls, will

allow increased use of residential

solar PV by controlling voltage and

VARs on each phase independently.

By integrating the LTC controls with

existing SCADA and other substation

sensors, improved situational

awareness and reliability

will result.

Integration of energy storage is

another objective of many regulators

and stakeholders focused on shifting

or mitigating peak electric demand.

To achieve these objective additional

capabilities, the NxG utility will have to

actively manage the distribution system. The integration

of monitoring and control (dispatching) of energy storage

devices also can be used to smooth out the voltage profile

on utility feeders and provide more predictable frequency

response during system events. This application is most

often associated with the output variability of larger solar

PV installations (see Figure 4) and corresponding adverse

impacts to feeder voltages. By adding energy storage (in

yellow) to the utility system, much of the power output

variability of the solar PV (blue) can be mitigated, allowing

the interconnection of the DER without adverse impacts

to other customers.

Utility storage will become more cost-effective as the

technology matures; however, certain existing applications

incorporate those operational benefits with economic

opportunities for demand response for kilowatt peak

shaving or shifting.

As the NxG utility integrates these adaptive protection

and control systems into the legacy system, the utility can

deal with issues of reverse power flows and seamlessly

allow for the development of microgrids. The Department

of Energy (DOE) defines a microgrid as “a group of

interconnected loads and distributed energy resources

(DER) with clearly defined electrical boundaries that acts

as a single controllable entity with respect to the grid and

can connect and disconnect from the grid to enable it to

operate in both grid-connected or island mode.”

Microgrids can take on many forms, ranging from a single

customer location to a campus-style environment or

an entire bulk substation integrating several generation

sources (see Figure 5). Customers seek to sectionalize

to an island mode of operation and return to the

interconnected grid system when reliability or economics

dictate. Targeted microgrid opportunities exist to

address customer needs for greater resiliency, improved

economics of DER and integration of renewable

energy resources. These opportunities could span a

broad spectrum from turnkey ownership and operations

to becoming the microgrid operator with balancing

responsibility or simply facilitating the interconnection

process to the legacy system. The economics and

contractual issues surrounding microgrids are still evolving

and may hinder their development in the near term.

Combined Output

Storage Output

PV Output

So

urce

: PN

M

Figure 4: Smoothing and ramping from energy storage 3


© 2015 PAGE 6 OF 9

INFORMATIONThe need for more information about the real-time

operation of the electric system both for the utility

operator and the customer will require additional

investment in sensor technology and telecommunications

systems. A host of emerging sensor and protective relay

technologies can improve reliability and restoration

speed. Reliability and resiliency of the grid can be

achieved by identifying faulted feeders and automatically

redirecting power flows, predicting imminent failures of

various components, or speeding the identification of

fault locations in a more systematic fashion across large

sections of utility systems. Using distribution feeder relays

to pinpoint fault locations — much like what is used to

detect the distance to fault location for transmission

line faults — is gaining acceptance and improving

restoration times and lowering costs. In many cases, the

existing protective relay systems are coming to the end

of their useful life, and this new technology provides

for: replacement of aging assets; advanced protective

features, including fast trip curves for worker arc flash

safety; improved automation for restoration with SCADA

capabilities; and future predictive reliability applications,

such as high impedance fault detection.

The desire is growing for real-time information and control

of home energy systems to enable improved comfort,

convenience, security and energy cost management.

Home automation systems will integrate new electric

generation sources, domestic hot water, heating/

ventilation/air conditioning, electric vehicle charging/

storage, and home security. The ability to manage home

generation and loads will empower customers to better

control their energy use.

Grid modernization builds resiliency into a more

integrated system that delivers more useful information

to the NxG utility and the customer. The heart of a more

modern grid is a robust communication network. Until

recently, the cost of deploying communications to large

numbers of remote data gathering and control locations

was a barrier to implementation. However, today many

alternatives address the last mile challenge with tiered

network architecture.

The telecommunications network (see Figure 6) shows

a combination of technologies with various tiers that

support a high-speed backbone ring for critical functions

Bulk Supply Connection(Subtransmission)Distribution

SubstationSingle Customer

Microgrid

Full SubstationMicrogrid

OtherFeeders

FeederPartial FeederMicrogrid

Full FeederMicrogrid

Gen Gen

GenLoad

Load

Load

Load

Gen

Figure 5: Microgrid topology; microgrids can range in size from a single customer to an entire substation


© 2015 PAGE 7 OF 9

like data centers, control centers and major facilities.

A medium-speed network serves as a collection point

to aggregate fi eld data and backhaul to the high-speed

network — like substations or area work centers supplied

with fi ber or microwave systems. A low-speed network

can reach the last mile or mobile applications —

like pole-mounted automation devices, advanced

metering applications or mobile computing with

private radio, radio frequency (RF) mesh networks

or 4G public carriers.

Figure 7 shows a proposed telecommunications

architecture to achieve the objectives of a more resilient,

integrated and smarter grid. Existing and proposed

fi eld devices appear at the bottom of the diagram.

The methods for communicating with the fi eld

devices are shown in the access technologies row.

The distribution and core technologies show how

data from the fi eld devices is communicated

to centralized collector sites and then

back to the control centers.

While the heart of the modern system

will be a robust telecommunications

infrastructure, the brain of the system

will be the integrated control systems

of a distribution management system

(DMS). These systems will continue to

evolve and off er the distribution operator real-time control

functions for traditional utility equipment, certain DERs

and methods to reach into customer systems to access

controllable loads. The deployment of low-cost sensors

with increased communication options, together with

the DMS, off ers vastly improved situational awareness

to the utility operator. At the same time, this smarter

infrastructure will deliver improved information customers

need to make informed energy use decisions.

OPE

RATION CONTROL CENTER

BACKBONE

Figure 6: Multi-tiered telecommunications network

CORE

Major Transmission | Data Centers | Control CentersINTERFACE SITES

Fiber

Fiber

Switch/Recloser Cap Bank LTC/Regulator Meter Transformer FCI

Mesh

PTP Radio Leased

PTMP Radio

Technologies

Cellular PLC Satellite

DISTRIBUTION

Transmission Substations | Radio SitesINTERFACE SITES

Technologies

ACCESS

Distribution Substations | Poles | Control PointsINTERFACE SITES

Technologies

FIELD DEVICESTechnologies

Figure 7: Telecommunications architecture4


© 2015 PAGE 8 OF 9

CONCLUSIONBy modernizing the grid in an intelligent fashion,

customers will receive improved blue sky reliability,

enhanced resiliency, increased choices for connecting DER

and better information to control their energy use. Utilities

can also benefit through targeted investments that

address aging assets, improve situational awareness and

provide a more useful, smarter grid for their customers.

See Figure 8 for a summary of the investment categories

and benefits to reliability.

There are many opportunities for electric utilities to

capitalize on the value of the grid, beyond the integrated

investments identified in this paper. Look for our next

installment of this series “Value of Grid: Choosing the Next

Generation Business Model,” where we will explore several

emerging business models for electric utilities. Working

with regulators and policy makers, electric utilities can

develop comprehensive plans to improve resiliency,

integrate higher penetrations of DER and enhance the

information available for the customer, truly becoming

the NxG utility.

REFERENCES1 Bowes K., Beehler M., “Defining the Value of the Grid,”

IEEE, The Sixth Annual IEEE PES Conference on

Innovative Smart Grid Technology, February 2015

2 Electric Power Research Institute, Integration of

Distributed Renewables — Program 174A: Modeling

and Simulation, 2014

3 Arellano B., “PV Smoothing and Shifting Utilizing

Storage Batteries,” Public Service of New Mexico, EPRI

Smart Grid Demonstration Project Advisor Meeting,

March 7, 2012

4 The Eversource Grid Modernization Plan, filed with

the Massachusetts Department of Public Utilities,

D.P.U. 15-122/15-123, Aug. 19, 2015

Investment CategoryReduce Outage

Impact Optimize Demand DER IntegrationSituational Awareness

Distribution automation (SCADA) X X X

Sensors and monitoring X X X

Resilient Substation flood mitigation X

Substation physical security X X

Cybersecurity X X X

Integrated

Volt/VAR optimization X X X

Energy storage X X X

Integrated planning and modeling of DER X X X

Microgrids X X X

Information(Smarter)

Advanced fault indication/prediction X X

Telecommunications infrastructure X X X X

Distribution management system X X X X

Figure 8: Grid modernization investment summary


© 2015 PAGE 9 OF 9

BIOGRAPHIES

KENNETH B. BOWES, VICE PRESIDENT OF ENGINEERING FOR EVERSOURCE ENERGY, Connecticut’s largest electric utility, is responsible for

engineering activities for the electric distribution system,

including: distribution planning, distribution engineering

and design, substation engineering, protection and

control engineering, telecommunications engineering,

and GIS for electric and gas operations. He establishes

the reliability, asset management and system resiliency

strategies for the annual program development and

the five-year capital program. He also manages the

distributed generation, microgrid, new technology

and R&D activities for the company. Additionally,

he executes the System Resiliency Program and the

Stamford and Greenwich Infrastructure Improvement

Projects. He serves as the lead witness for regulatory

proceedings and serves as the Connecticut Incident

Commander for system restoration activities. He

earned a bachelor’s degree in electrical engineering

from the University of New Hampshire and a master’s

in electrical engineering from Rensselaer Polytechnic

Institute. He is the past chairman of the Edison Electric

Institute’s Transmission Committee and serves on

the EEI Transmission and EEI Security committees.

MICHAEL E. BEEHLER, PE, VICE PRESIDENT, joined Burns & McDonnell as a senior transmission

engineer and project manager in 1995, after 14 years with

investor-owned electric utilities in Tucson, Arizona, and

Honolulu, Hawaii. In the late 1990s, Beehler developed

the application of reliability-centered maintenance to

the transmission industry and, in late 2001, he helped

lead Burns & McDonnell’s initial development of the

critical infrastructure security practice. He has written

and presented several papers on reliability-centered

maintenance, security and, in 2003, the application of

program management in the transmission industry.

Subsequently, Burns & McDonnell has been involved

in the program management of numerous projects

throughout the United States. He has written and

presented extensively about the smart grid and

has initiated the Sustainable Electric Energy Design

(SEED™) process for substation design. He received

his Bachelor of Science degree in civil engineering

from the University of Arizona in 1981 and a Master of

Business Administration degree from the University

of Phoenix in 1984. He is a registered professional

engineer in eight states, a member of IEEE and a

fellow in the American Society of Civil Engineers.

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Capitalizing on the Value of the Grid: Becoming the Next .../media/files/insightsnews/insights/tech... · BECOMING THE NEXT GENERATION (NXG) ... provide backup power from an alternative